FTX Goes After Another High Level Executive• June 29, 2023 11:25 am • Comments
FTX continues to seek recourse against its former executives and insiders. …
According to the latest court documents, the now-defunct exchange has filed a lawsuit against Daniel Friedberg—FTX’s former Chief Compliance Officer.
Friedberg is accused of accepting bribes and breaching his fiduciary duty. Additionally, he is alleged to have stifled or otherwise suppressed whistleblowers who wanted to sound the alarm on the company’s fraudulent practices.
FTX 2.0 Coalition—an FTX creditor seeking to be made whole, had this to say about the current allegations.
FTX sues former General Counsel Daniel Friedberg.
Multiple whistleblowers are alleged to have been paid off by Friedberg, starting as early as 2019.
He is accused of Breach of Fiduciary Duty, Malpractice/Negligence, Corporate Waste, Aiding and Abetting. pic.twitter.com/eE4eUM0k3r
— FTX 2.0 Coalition (@AFTXcreditor) June 28, 2023
Thomas Braziel points out, “I cannot believe no one has highlighted this – Doc 1727 – AP against Daniel Friedberg – is not styled as fraud, but as ‘breach of fiduciary duties’ through the AP – clearly trying to tap D&O against Daniel – next stop is clearly going to be a large claim against Fenwick (Daniel’s former law firm).”
#FTX – I cannot believe no one has highlighted this – Doc 1727 – AP against Daniel Friedberg – is not styled as fraud, but as 'breach of fiduciary duties' through the AP – clearly trying to tap D&O against Daniel – next stop is clearly going to be a large claim against Fenwick… pic.twitter.com/VCF54a3EiL
— Thomas Braziel (@ThomasBraziel) June 29, 2023
some might say they went full tilt pic.twitter.com/t0GcL3i7OD
— Spreek (@spreekaway) June 26, 2023
Decrypt dissected the allegations:
The charges include breach of fiduciary duty, legal malpractice, corporate waste, and several others related to fraudulent transfers. Damages related to some charges are to be determined at trial.
Others, centered on fraudulent charges, seek to reclaim payments plus interest related to Friedberg’s $300,000 salary at FTX US, a $1.4 million signing bonus, an 8% equity stake in the US-facing exchange, a $3 million payment from Alameda.
Reuters confirmed and summarized the current legal action against the former FTX insider: “Bankrupt cryptocurrency exchange FTX sued one of its former top lawyers, accusing him of aiding fraud by company founder Sam Bankman-Fried and silencing whistleblowers who reported wrongdoing at the company.”
Bankrupt cryptocurrency exchange FTX sued one of its former top lawyers, accusing him of aiding fraud by company founder Sam Bankman-Fried and silencing whistleblowers who reported wrongdoing at the company https://t.co/xGhKLWxWrV pic.twitter.com/x2kI61FU9K
— Reuters Legal (@ReutersLegal) June 28, 2023
According to Protos:
FTX is asking to receive Friedberg’s compensation during his time at the firm, including digital assets worth tens of millions of dollars, his ownership stake in FTX US, and $4.7 million in bonuses and salary. Friedberg reportedly received an 8% stake in FTX US but may have held less than that when FTX filed for bankruptcy in November 2022.
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